In a June posting I predicted that the Labour Party’s promises to slash the numbers of migrants to New Zealand had already been trumped (excuse the expression) by policy changes introduced under the National-led Government. That appears to have come true.

NZ Residence Programme

A Radio New Zealand article from the end of October disclosed that the number of applications lodged for Skilled Migrant Residence in April – September 2017 were nearly 50% less than for the same period in 2016. It suggested that if the trend continued, overall Residence approvals would be likely to fall to about 29,000 for the current financial year (to June 2018). This would far exceed the sort of cut Labour originally suggested it would like to see in “long term migrants”, and would even warm the hearts of New Zealand First supporters from the Kiwi heartland.

Note that almost all of the shrinkage so far took place before Election Day. It was a reaction to both the upward adjustment of the Skilled Migrant Category (SMC) points threshold in October 2016, and the announcement in April 2017 of the changes to SMC and Essential Skills Work Instructions which the Government intended to roll out at the end of August.

This is not good news, though. The Government Residence Programme, which is set every few years, was recently recalibrated to direct the acquisition of 85-95,000 approvals over the 2 years to June 2018. This is something of a reduction from previous periods, but the NZRP target range has remained reasonably steady for about 15 years. And it has not been met on a number of occasions since 2010. If the above prediction is correct, then there will be a major shortfall by the middle of next year too. About 60% of the Programme is to be filled by Skilled Migrant and Business Residence applications. These are meant to attract skills, investment capital and entrepreneurial talent. Most commentators agree that we need more of these inputs for New Zealand to remain sustainable in the long term, but we are looking down the barrel of a drought of these people and funds.

So Labour has drawn back from proposing major changes to the SMC points system. Even if it had planned to make new policy, I believe that there would have been significant push-back from the real policymakers – the analysts and bureaucrats of the Ministry of Business, Immigration and Employment who have been working solidly on adjustments to the SMC settings since mid-2016. They are justified in urging Government to “wait and see” the effects of the major changes to SMC Residence and Work Visa Instructions which only came into effect at the end of August.

Students and Low-Salaried Workers

Instead, Labour’s Election Manifesto on Immigration focuses on the tide of students who have historically gained rights to Work Visas in relatively low-end jobs as a pathway to Residence. For example, they propose to remove the ability to get a post-study “Job Search Visa” (as we used to call it) for anyone qualifying below bachelor’s degree level. In recent immigration mythology, the foreign student population has become one of the folk devils responsible for most of the pressures on our infrastructure and way of life – from house prices to Auckland’s traffic woes.

But it remains to be seen whether the new Government will have the political will to keep reducing the attractiveness of studying in New Zealand as a means to living here long-term. For one thing, export education earns lots of tax dollars – money that Labour needs in order to fund its expansive plans for social housing, erasing child poverty and so on. For another, powerful interest groups such as Federated Farmers and the Restaurant Association have already campaigned vigorously to protect the ability of relatively low-paid migrant employees to get Work Visas – because those major sectors of the economy are unsustainable without them. And, despite the repeated mantra of, “Study does not guarantee Residence”, the fact is that people from all over the world want to find ways to come to a ‘Western’ country to live. Whether Government likes it or not, New Zealand must compete for those tax dollars, and as a small-fry player too. If we become too unattractive, they will go to Australia, Canada or the US.

The Coalition has a tenuous hold on power, and faces a vigorous and motivated Opposition. If Labour wants a second term, it will have to compromise both with its xenophobic partner (NZ First) and with industry and business groups who are also voters and who influence opinion.